Emerging Economies
Gordon Birtwistle Excerpts(14 years, 5 months ago)
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Chris Bryant
Nice try, but we will come a little later to the problems that I see with the Conservative-Lib Dem Government’s approach to growth and why I think this debate points to some of the problems that we will see over the coming years. But no, I think that the problems in Argentina stretch back across 100 years. The Argentines failed to take advantage of their many strengths and they played their politics extremely badly. My fear is that they are doing exactly the same thing today.
The task for all those countries is to ensure their growth, while the task for us is to ensure that we match their performance pound for pound, real for real. It is worth bearing in mind how significant those economies are to the UK. To all intents and purposes, we are Russia’s banker, while we are Brazil’s seventh trading partner in terms of exports and India’s fourth. The emerging economies have become increasingly dependent on each other in recent years; thus China has now overtaken the USA as Brazil’s major partner. Our position in relation to the emerging economies should be to seek to do three things: first, build UK growth; secondly, fight bilaterally and on an international level for free and fair trade, rather than protectionist measures, which is something to which the Minister referred; and thirdly, constantly underline the importance of the rule of law and human rights.
Let me start with growth. I simply do not believe that it is possible for the UK to achieve a greater share of the markets, or a stronger role in the world, without a strategy for UK economic growth. The Foreign Secretary can huff and puff as much as he wants, but if the Chancellor is focusing only on cutting the deficit—whether through cutting expenditure or increasing taxes—and has no strategy for growth, we will have nothing to sell abroad, we shall lose out economically, and the Foreign Secretary will simply be left to manage the decline of our reputation abroad.
Chris Bryant
I shall give way first to the newer Member, then to the old lag.
Gordon Birtwistle
Does the hon. Gentleman agree that, over the past 13 years—and probably even over the past 25—the products that we sell abroad have diminished because of Government policy? We now have very little to sell, apart from in the financial markets, because most of our manufacturing has moved to the emerging economies.
Chris Bryant
Strictly speaking, that is not statistically right. Yes, when Burberry tried to close its factory in my constituency, I fought hard to ensure that the business would not be taken to India or China. I do not think that most people would want to buy a high-quality Burberry product that purported to be British if it had not been made in the UK. Unfortunately, we lost that battle. However, we export a lot more than just financial services. For example, a lot of our exports relate to extractive mineral industries, which I shall come to in a moment—[Interruption.] I sense that Hartlepool is springing to its feet.
John Howell (Henley) (Con)
Let me start by thanking all the hon. Members who made maiden speeches tonight. I suspect that when I came into the House after a by-election colleagues breathed a sigh of relief at the fact that they had only one maiden speech to concentrate on. Tonight we have had three, but they have been three excellent speeches. I particularly welcome a fellow central and east European cold warrior to the Conservative Benches, particularly in the context of this debate.
It is nice, too, to return to a subject that I left professionally almost a decade ago, when I was the author of the Ernst and Young emerging markets reports. It was a monthly attempt to score key markets for attractiveness, principally from the point of view of foreign direct investment. The big emerging markets of the day were in eastern Europe, which seem still to be the big emerging markets of today, as if nothing had happened. Many are still on the list, despite being members of the European Union. Then, as now, the big enigma was the role of Russia.
In the intervening decade there seems to have been in the field a long march of taxonomists, who have sought to subdivide emerging markets almost ad infinitum. The Financial Times divides them into advanced and secondary emerging markets, based on national income. Morgan Stanley divides them into developed, emerging and what it calls frontier markets. There is a core group of markets on which everyone agrees, with a few others, such as Saudi Arabia, around the edges.
I am not sure that such taxonomy is of any use. What we are still dealing with are industrialising countries with large growth and large potential, accompanied by equally large risk and insecurity. Most of that taxonomy, anyway, is capital markets-driven, but a very different picture often emerges if one looks at those economies not as capital markets, but as markets for foreign direct investment or for export. Indeed, when for a brief while I presented business programmes for BBC World Service television, I visited more emerging countries’ stock exchanges than I care to remember. Undoubtedly the smallest but one of the most enthusiastic was that in Mongolia, but we should remember that the Mongolian stock exchange is not there to generate capital for its companies; it is there as a social device for the equitable distribution of newly privatised assets, most of those by means of mass or voucher privatisation, which the UK has sponsored. Inevitably, those are high-risk procedures, but experienced capital-market players can largely cope with such risks.
A good question is how we define the difference between emerging economies and emerging markets. We are talking about the attractiveness of such economies in business terms, with their export-led focus, use of agents, joint ventures and, indeed, direct investments. In my time as a partner at Ernst and Young, I helped many small and medium-sized enterprises into emerging markets, but we have to be realistic, because one of the biggest constraints on them is the amount of time involved in entering such markets.
Sadly, the majority of SMEs that came to me for advice came when they were on their last legs in the UK—their markets having disappeared for one reason or another—and they wanted an emerging market and an emerging economy as a means of getting them out of their problems. I am not saying that that cannot be done; it can. The company that I set up with a business partner did so, but it meant that one of us was always on the road, particularly as our first major project was to produce what I can only describe as a pop video of Manmohan Singh, to be shown at an international conference. It was incredibly difficult, because the essential humility of the man meant that his character did not fit into the pop video class. The business meant having to be away for quite a long time and, in a business with two principals, one can imagine the difficulties that arose.
We need to take a balanced view of individual countries, and to make an assessment that some will need more help than others and more encouragement from Government if they are to export. There is a lot of talk about the emerging economies that are in fashion today and out of fashion tomorrow, but not all of that is based on the objective, analytical criteria of companies such as Morgan Stanley; much of it is based on gut feeling.
We spoke earlier about one barrier being the difficulty of language, but one that is frequently overlooked is the difficulty of culture. I remember how, at an INSEAD seminar, the most distinguished cultural scientist on the matter, Fons Trompenaars, put forward his view on cultures and how that can help people assess them and do business. His view is based on a number of individual dilemmas that he put to about 15,000 people throughout the world.
The most famous is known as the dilemma of the car and the pedestrian. Essentially, we are in a car driven by a friend who exceeds the speed limit and knocks down a pedestrian. On the question of the driver’s expectation that we will lie for him, the worst place in the world, according to Fons Trompenaars, is Canada, where 96% of people would shop their friends to the police. Emerging markets, however, are some of the best places to have friends: in South Korea, 26% would shop their friends; in Russia, 42% would; and in China, the figure is 48%.
Those responses should not be taken literally, but they are indicative of how much obligations to the state outweigh obligations to individuals. [Interruption.] The Minister of State, Foreign and Commonwealth Office, the hon. Member for Taunton Deane (Mr Browne) laughs, but Britons figure at 90% on that scale, so the UK is not too good for friendship. Interestingly, however, those questioned in the UK asked how seriously the pedestrian was hurt. If they were more seriously hurt, there was more of an obligation to the state than to the individual. One has only to cross the channel to obtain completely the opposite result, where the more the pedestrian is hurt, the more the driver obtains our assistance in lying, because their punishment would be more severe. That may seem academic, but I recommend the work of Fons Trompenaars to hon. Members; it provides a useful, pragmatic framework for considering emerging markets. For example, it draws out the frequency with which developed countries depend on legal agreements and big contracts.
Gordon Birtwistle
My concern, which the hon. Gentleman may well be able to answer, is about the fact that the emerging markets have now taken away our heavy industry—shipbuilding, steel and things of that nature. How do you see this country fighting back against the emerging markets, with jobs of the future? I accept that we have advanced engineering in aerospace and other such sectors, but many residents of the country do not have the skills to be involved in that type of industry. How do you see the UK fighting back against the emerging markets in respect of less skilled jobs?
Mr Speaker
Order. I gently point out to the hon. Gentleman that I do not see anything, although I think that the hon. Member for Henley (John Howell) will.
Foreign Affairs and Defence
Gordon Birtwistle Excerpts(14 years, 6 months ago)
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Gordon Birtwistle (Burnley) (LD)
I am grateful for the opportunity to make my maiden speech so early in the new Parliament. I pay tribute to those who made their maiden speeches before me—the hon. Members for Beckenham (Bob Stewart), for Bolton South East (Yasmin Qureshi), for Halesowen and Rowley Regis (James Morris), for Stafford (Jeremy Lefroy) and for Stalybridge and Hyde (Jonathan Reynolds). I know Stalybridge quite well because I am always delivering precision machine parts to a company based there.
It was a great privilege in the early hours of 7 May to be elected as Member of Parliament for Burnley. Burnley now has a Liberal Democrat Member of Parliament—the first time that Labour has not held the seat since 1935, a period of 75 years. Burnley is a special place at the heart of Pennine Lancashire, with lovely countryside and friendly people. We have an abundance of waterways, canals, rivers and reservoirs, all of which played their part in our industrial heritage, which has sadly declined over the years. The old industries of cotton, textiles, coal and heavy engineering have now all but disappeared. The industries may have declined, but the industrious spirit of the north remains as strong as ever.
One of my main interests in this Parliament is to promote sustained growth in the high-tech, high-value manufacturing sector, both locally and nationally, that will deliver pride and prosperity for this nation. The sector is already well established in Burnley, whose businesses include Aircelle, manufacturer of thrust reversing systems for the Rolls-Royce Trent engines used by airlines around the world; MB Aerospace, which manufactures launch canisters for the American Harpoon missile; Futaba Tenneco, which manufactures major body parts for the current range of Toyota vehicles, which are sold around the world; and many other small high-tech manufacturing companies that serve the aerospace, nuclear and automotive sectors.
We need to ensure that students are provided with the relevant education to prepare them to undertake these high-tech roles. By providing people with the skills that employers require, we will also be providing them with the ability to earn a good living wage. Burnley’s new sixth-form college and university campus, which is dedicated to advanced manufacturing, goes some way to delivering these opportunities in Burnley and must be replicated elsewhere across the country.
I give my heartfelt thanks to the constituents of Burnley for having faith in me and the courage to vote for change—change that I believe can be delivered by this new type of coalition Administration, harnessing the best policies of two fresh parties both committed to raising our country out of the current difficulties, which should not be underestimated.
At this point, it is customary to make reference to the contributions of predecessors. Kitty Ussher represented Burnley for five years, and in that time she gave birth to her two children, Lizzie and George. Kitty realised first hand the problems of combining being a mother and a Member of Parliament, and she began a campaign for family-friendly working hours. Kitty worked hard to help deliver the Building Schools for the Future programme in Burnley and she will be pleased to hear that the final two schools will be opened in time for the commencement of the new school year. Together with all the people of Burnley and Padiham, I wish Kitty success in her future career outside Westminster.
The people of Burnley and Padiham are good, decent and hard working. They are outspoken and direct, and unafraid of speaking their minds. Serving them as a local councillor and council leader for the past 28 years has given me a thorough, in-depth apprenticeship in how best to serve their needs in Parliament. I will always put the needs of the people of Burnley and Padiham first in my parliamentary activities, as I will never forget that their faith in me has brought me here today.
The most pressing current issue for the residents of Burnley and Padiham is the transfer of our accident and emergency unit, which was taken from us in 2008 and relocated 15 congested miles away at the Royal Blackburn hospital. Now, the threat of the transfer of our children’s ward to the same hospital, which for many people is accessible only with a great deal of difficulty, is considered to be a step too far. I am heartened to have received a statement from my right hon. Friend the Health Secretary outlining the new coalition Government’s vision for locally led NHS service changes. That vision gives me hope that the transfer of the children’s ward will not now take place. I will continue to press for the full return of the accident and emergency facilities that are so vital to the 250,000 residents of Burnley, Pendle and Rossendale.
Once again, I thank the people of Burnley for their courage and faith in me. I assure them all that I will always represent them to the best of my ability. Mr Deputy Speaker, I thank the House for listening to my speech this evening.